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A company has several expenses during 2018. Some of them were.,
Electricity – 6500
Water – 1700
Salaries – 180000It is now 15th February and the accountant has to make some final entries before the financial records of 2018 are closed. He notes the following:
The audit of 2018 will start in the beginning of March. For the past two years the audit fee has been the same, $5000.
Electricity paid in 2018 did not include December. It was paid in January 2019 and the portion was $500.
The water expense paid in January 2019 included December as well which amounted to $300.
During the Christmas Holidays, an employee requested an advance against his salary i.e to receive half of January salary in December. This amount was $1500.
Prepare extracts of the Profit and Loss Account plus Statement of Financial Position for 2018. Also, write up t accounts for Electricity, Water, Salaries, Audit fees indicating amounts that should be reported in the Profit and Loss accounts and statement of Financial Position at the end of the year and subsequent year.
Please do not simply type out a full question and expect to be provided with a full answer. You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about.
Everything needed for this question is explained in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Do appreciate however that this question could not be asked in the exam. You cannot be asked to write up t-accounts in the Paper FA exam (even though you are expected to understand them).
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